Furnished holiday lettings fail in claim for IHT relief
The possibility of tax savings on holiday lettings has fallen following a recent tax case (HMRC v Pawson  UKUT 050 (TCC)).
The tribunal determined that inheritance tax business property relief should not be available in relation to the estate’s furnished holiday let property.
The decision held that only at the far end of the spectrum of possible letting businesses will the business also involve the provision of services so extensive as to override the investment element. In any standard case, even an actively managed property letting business, would be considered as an ‘investment’ business; and furnished holiday lettings should not be given any special treatment.
This is clearly bad news for the owners of furnished holiday lettings because the implication is that very few of them will qualify for IHT relief.
Date: 25th February, 2013
Articles from this Author
1st November, 2018
Budget 2018 - Changes for businesses
22nd October, 2018
Making the most out of your home? Rent a room relief
3rd May, 2018
Tax changes for non-resident corporate landlords
4th April, 2018
EMI options - a current risk
Contact Business Service Partners
Choose from the drop down menu below to select a Partner to contact.
Sandy Bell, Partner in Rickmansworth considers the merits of Furnished Holiday Lettings in Optima magazine… twitter.com/i/web/status/1…
For the latest Mercer & Hole news, visit our LinkedIn page mercer-&-hole